Taylor v. Scoville — 10 N.Y. Sup. Ct. 301

Majority

p. 301

SAMUEL J. TAYLOR, Appellant, v. AMOS S. SCOVILLE, Respondent.

Headnote

Cont/ract—fra/udulent representations — right of party decerned to rescind cont/ract.

The plaintiff, relying upon representations made to him by the defendant, that • he was the owner of a farm worth $7,000, and of other property, entered into an agreement to work for him for eight months, at twenty dollars a month. After working for two months, plaintiff discovered that defendant’s wife was the owner of the farm, although the defendant owned personal property upon it worth more than $1,000 and was out of debt. Retd, that the plaintiff was entitled to rescind the contract and recover for what he had done under it.

Appeal from a judgment of the County Court, in favor of the defendant, entered upon the verdict of a jury.

E. D. Harris, for the appellant.

■ L. Varney, for the respondent.

When this ease was before this court ,on a former appeal,^[1] it had been tried as an action to recover damages on account of the defendant’s fraud. The judgment obtained by the plaintiff was properly reversed, because the court below had, in substance, charged the jury that the plaintiff could recover upon the fraud of the defendant, without showing himself injured thereby. That is to say, not because the plaintiff had sustained damage, but because the defendant had done wrong. The action has been retried, resulting in a judgment in favor of the defendant, from which the plaintiff appeals. The County Court, upon the retrial, treated the action as founded upon contract. Such it manifestly is. The complaint states no cause of action, unless it is for services rendered upon contract. The case may be examined .upon its merits. The plaintiff agreed with the defendant to work for him, as a farm laborer, for twenty dollars per month. The plaintiff testified that, at the time of the hiring, the parties were strangers to each other, and the defendant represented to the plaintiff that he had a farm worth $7,000, and other property. Plaintiff also testified that he would not have entered into the defendant’s employment but for this representation that he owned the farm. He worked for the defendant for two months, then discovered that the defendant’s wife owned the farm, quit work, and sued for his wages.

The defendant denied making any such representation; testified that the plaintiff agreed to work eight months; that though he did not own the farm, he owned the personal property upon it, of the value of more than $1,000, and was out of debt.

How, if the plaintiff swore to the truth, the defendant made to him a material misrepresentation, largely affecting his credit. If defendant’s representations were true, the plaintiff would be reasonably sure of receiving payment for his eight months’ labor. When they proved to be false, he had no reasonable or sufficient surety. For the man who is in the position to interpose his wife’s title as a shield against the payment of his honest debts, is in a position to defraud his workmen, at least to excite their distrust. Fraud vitiates the contract which it taints, and the plaintiff, upon discovery, had the right to rescind it, and recover for what he had

* 54 Barb., 34 .

p. 303

done. The defendant could not insist upon his full performance as a condition precedent to recovery, for that would enable him to take advantage of his own wrong. The fraud of defendant does not constitute the ground of recovery, but does excuse the plaintiff’s further performance. If the contract had been fully executed by the plaintiff" before discovery of the fraud, the fraud would have been immaterial, unless he could show damages resulting from it. But while a contract remains executory, in whole or in part, the discovery of the fraud gives the innocent party the right to rescind it. One may not récover for the fraud which has not harmed him, but when he detects it he may avoid further risk from it. That he has not been hurt in the past, imposes no obligation for the future. It is obvious that every man has the right to judge for himself, upon what risk or credit he will part with his time, his labor, or his property; and if he is induced to agree to part with them upon a material misrepresentation as to the character of that risk or credit, no court of equity will decree specific performance, and no court of law should punish for non-performance. But such punishment was administered to this plaintiff. The court charged the jury, “if the defendant tells the truth in regard to his property, then it affirmatively appears that at that time he was solvent, and that no injury arose to the plaintiff, although the defendant did not own the farm as he stated, but had personal property enough to pay the debt.” The plaintiff duly excepted to this and other portions of the charge, and to refusals to charge, in which the principle we have discussed is involved.-

The judgment should be reversed and a new trial ordered, costs to abide the event.

Present — Bookes, P. J., Couhtetmaií and Laotdon, J'J.

■ Bookes, P. J., dissented.

Judgment reversed and new trial granted, costs to abide the event.